California Earth Corps v. State Lands Commission

Filed 4/8/08 California Earth Corps v. State Lands Commission CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Sacramento)

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In April 2005 we determined that the 2001 exchange of tidelands in Long Beach protected by the public trust doctrine for parcels along the Los Angeles River did not comply with former Public Resources Code section 6307.^[1] We found the exchange did not enhance the configuration of the shoreline and concluded the trial court should have granted plaintiff California Earth Corpss (Earth Corps) petition for writ of mandate. While pending review in the Supreme Court, the State Lands Commission (Commission) sponsored legislation revising former section 6307, which became law.

Earth Corps requested an award of costs and attorney fees pursuant to the private attorney general provisions of Code of Civil Procedure section 1021.5. The trial court denied the request, finding the action did not convey a significant benefit within the meaning of section 1021.5. Earth Corps appeals, arguing the underlying action conveyed concrete benefits sufficient to invoke section 1021.5. We shall affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Tide and submerged lands and beds of navigable waterways are subject to the public trust for commerce, navigation, fisheries, recreation, and environmental protection. The state acquired these lands and holds them for the benefit of the People to be used for purposes consistent with the trust. Section 6307 permits the Commission, under limited conditions, to exchange certain lands subject to the public trust for other lands by removing the trust on those lands exchanged out of the trust and imposing the trust on other lands exchanged into the trust.

The Players

The Commission and the City of Long Beach (City) agreed to transfer three acres of tidelands in Long Beach (the Queensway Bay parcels), protected by the public trust doctrine, out of the public trust in exchange for 10 acres along the Los Angeles River (the Queensway exchange), which would then become public trust land.

The transfer would allow the City and real party in interest Developers Diversified Realty Corporation (Developers Diversified) to move ahead with the Queensway Bay Development Plan, which would entail construction of a large retail and entertainment complex along the waterfront.

Earth Corps opposed the transfer.

The Underlying Litigation and Our Opinion

In April 2005 we determined that the exchange of the Queensway Bay parcels for parcels along the Los Angeles River did not comply with former section 6307, as amended (Stats. 1968, ch. 1354, 1, repealed by Stats. 2005, ch. 585,  2, eff. Oct. 6, 2005). (California Earth Corps v. State Lands Commission (Apr. 21, 2005, C041603) [nonpub. opn.].) Specifically, we found the Queensway exchange did not enhance the configuration of the shoreline and ordered the petition for writ of mandate be granted. The Supreme Court granted review.

While review was pending in the Supreme Court, the Commission sponsored legislation repealing former section 6307 and adding a revised section 6307. (Stats. 2005, ch. 585,  2 & 3, eff. Oct. 6, 2005.) The revision authorizes exchanges that facilitate access, allow for near-shore development, and improve the arrangement of tidelands under the public trust.

Earth Corps requested the Supreme Court to dismiss review in light of the legislation. Earth Corps informed the court that section 6307 has been revised in a manner that eliminates the specific issue that was the ground on which the Court of Appeal ruled. The new legislation provides that the State Lands Commission may approve an exchange if the exchange enhances the physical configuration of the shoreline, thus endorsing the Court of Appeals requirement for a physical change.

The Supreme Court dismissed review. We issued a remittitur remanding the case to the trial court. The trial court issued a judgment directing the issuance of a peremptory writ of mandate ordering the Commission to vacate and set aside the Queensway exchange and its termination of the public trust on the Queensway Bay parcels. The judgment also provided that nothing in the judgment shall limit or control the discretion legally vested in the Commission. In the appeal of that judgment, California Earth Corps v. State Lands Commission (Sept. 6, 2007, C053271) [nonpub. opn.], we affirmed the trial courts judgment granting a peremptory writ of mandate.

Earth Corps brought a motion for attorney fees and costs under the private attorney general doctrine. (Code Civ. Proc.,  1021.5.) The Commission, the City, and Developers Diversified all opposed the motion.

The trial court denied the motion. The court found Earth Corpss suit had not provided a significant benefit to the general public or a large class of persons. In reaching this conclusion, the court cited a variety of factors: our opinion was unpublished, the revised statute provided the Commission with even broader authority to approve the exchange, the Legislatures revision of section 6307 was contrary to the purpose of Earth Corpss action, the statutory amendment provided the Commission with the express authority to approve the exchange, the public trust would lose the 10 acres of land on the Los Angeles River, and the record did not show the suit would impact the development of the Queensway Bay parcels. The trial court did not address the issue of the reasonable amount of fees. Earth Corps filed a timely notice of appeal.

DISCUSSION

CODE OF CIVIL PROCEDURE, SECTION 1021.5

Code of Civil Procedure section 1021.5 is a codification of the private attorney general doctrine. The fundamental objective of the private attorney general doctrine of attorney fees is to encourage suits effectuating a strong public policy by awarding substantial attorney fees to those who successfully bring such suits and thereby bring about benefits to a broad class of citizens. The doctrine recognizes that privately initiated lawsuits are often essential to the accomplishment of fundamental public policies embodied in constitutional or statutory provisions. Without such a doctrine, private actions to enforce such important public policies will as a practical matter frequently be infeasible. (County of Colusa v. California Wildlife Conservation Bd. (2006) 145 Cal.App.4th 637, 647 (Colusa).)

Code of Civil Procedure section 1021.5 provides, in part: Upon motion, a court may award attorneys fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.

STANDARD OF REVIEW

At the outset, the parties disagree over the standard of review we employ in considering the trial courts denial of attorney fees under Code of Civil Procedure section 1021.5. Earth Corps argues we review the trial courts determination de novo; the City, Developers Diversified, and the Commission (collectively, defendants) urge review under the abuse of discretion standard.

Earth Corps is correct in its assertion that where the entire basis of a fee award is an appellate reversal, the appellate court may be better situated than the trial court to decide whether attorney fees should be awarded. Certainly, the appellate court is better situated when the important right affecting the public interest (Code Civ. Proc., 1021.5) is vindicated by principles first recognized in the courts published opinion and where the measure of the public benefit can be taken without reference to evidence presented to the trial court. However, the present case cannot be so described.

Here, the litigation did not result in a published opinion articulating rules that would guide the adjudication of similar public trust claims in the future. The litigation over the public trust doctrine and the Queensway Bay parcels did not end with our opinion. Instead, our opinion only set the stage for further litigation and directly led to legislation that altered the statutory basis for the opinion, thereby limiting its impact to the parties before the court. In that regard, this case is unlike Wilkerson v. City of Placentia (1981) 118 Cal.App.3d 435 (Wilkerson), a case cited by Earth Corps. There the appellate court resolved an issue that the trial court never got to . . . because of its decision on the merits and the decision ha[d] an impact over a very wide area of virtually all employees in the public sector. (Id. at p. 445.)

We appreciate the distinction made in Los Angeles Police Protective League v. City of Los Angeles (1986) 188 Cal.App.3d 1 (Protective League), another case relied on by Earth Corps,between litigation that begins and ends at the trial court level and litigation that results in an appellate opinion. However, Protective League should not be read as holding that in the latter circumstance, the standard of review is always de novo. Rather, the court in Protective League emphasized that it was only elaborating the sentiment expressed in the rationale of Wilkerson . . . . (Protective League, at p. 11.) As the court observed, where a courts decision on public benefit and the legal effect of an opinion is more of a value judgment than an issue of fact, [t]here is no good reason for an appellate court to defer to a trial courts value judgment. (Id. at p. 9.) We are not dealing here with value judgments divorced from the record of trial. Here, the extent to which the litigation advanced important rights affecting the public interest and conferred a significant benefit on the public depends on a consideration of facts concerning the proposed project, the existing use of the property, and the impact of the subsequent legislation. In our view, the public interest and public benefit cannot be measured without reference to evidence and events properly considered in the first instance by the trial court, whose decision should be then reviewed by this court for an abuse of discretion.

Significant Benefit to General Public

The trial court denied Earth Corpss motion for attorney fees, finding the underlying litigation did not confer a significant benefit to the general public or a large class of persons. The decision whether to award attorney fees under Code of Civil Procedure section 1021.5 rests initially with the trial court. Using its discretion, the trial court must realistically assess the litigation and determine, from a practical perspective, whether or not the statutory criteria have been met. Since section 1021.5 states the criteria in the conjunctive, each of the statutory criteria must be met to justify a fee award. (Colusa, supra, 145 Cal.App.4th at pp. 647-648.)

In reviewing the trial courts decision for an abuse of discretion, we pay particular attention to the trial courts stated reasons in denying the fees and determine whether it applied the proper standards of law in reaching its decision. We may not disturb the courts exercise of its discretion absent a showing that there is no reasonable basis in the record for the courts decision. (Colusa, supra, 145 Cal.App.4th at p. 648.)

Here, the trial court considered the initial requirement under Code of Civil Procedure section 1021.5 that the petitioner was a successful party in an action that has resulted in the enforcement of an important right affecting the public interest. The court found this condition met: This action resulted in requiring the . . . Commission to act within the terms of . . . section 6307 as those terms existed at the time of the appellate court decision. The case concerned protecting the public trust which is a matter of importance. The case was about more than a mere technical defect in the approval of the land exchange.

However, the court found the second requirement, whether or not a significant benefit has been conferred on the general public or a large class of persons, had not been met. The trial court specified a number of rationales for its decision.

The court noted that although Earth Corps succeeded in invalidating the exchange, [t]here is now new legislation which grants even broader authority to [the Commission] than it had before. The benefit to the public achieved by this litigation, other than setting aside the particular exchange in question, is that the legislature has clarified the law by amending . . . section 6307. However, petitioner should not get credit for the enactment of new legislation that is contrary to the original purpose of this petition.

The court further reasoned that if the goal of Earth Corps in pursuing the litigation was to clarify and broaden the authority of the Commission, as the legislative amendment accomplished, it could have proposed that legislation in the first place. However, the court noted the evidence is that petitioner opposed this legislation.

In addition, the court theorized that the Commission apparently now possesses the authority to make the land exchange at issue. According to the court: While [the Commission] has been ordered to set aside the particular exchange that precipitated this petition, it presumably can now approve the same exchange if it wants to, or it can approve some other proposal. Setting aside the exchange agreement also removes the public trust protection that the exchange imposed on ten acres along the Los Angeles River.

Nor did Earth Corpss petition have any effect on the development plans on the parcel. The trial court acknowledged the proposed movie theater had not been built, but based on economic reasons not necessarily related to this lawsuit. The court also stated our opinion had been unpublished.

Finally, the court concluded: I find that there has been some benefit to the public from this lawsuit. But the benefit conferred is not significant within the meaning of . . . section 1021.5.

Earth Corps disputes the trial courts analysis of the underlying litigation. According to Earth Corps, its petition and our resulting opinion clarified the law to the significant benefit of the public. Because of its actions, Earth Corps argues, the Commission must now revisit the exchange. Setting aside the proposed exchange was Earth Corpss goal, and forcing reconsideration of the exchange is sufficient to qualify as a significant benefit to the general public.

In addition, Earth Corps contends neither the small area of land at stake nor the possibility of reapproval of the exchange negates the significant benefit its litigation bestowed on the People of the state.

The Commission, Developers Diversified, and the City all take issue with Earth Corpss contentions. Developers Diversified argues litigation that results in legislative change confers a significant benefit only where the legislation affirms the appellate decision. Here, in contrast, Developers Diversified contends the legislation specifically conferred the power to approve the proposed exchange, the antithesis of what Earth Corpss petition sought to achieve.

The City concedes our opinion required the Commission to set aside its approval of the exchange agreement, but argues this resulted from a technicality, a procedural development that conferred no substantive benefit on the public. The City labels the result of Earth Corpss original petition a Pyrrhic victory [that] cannot support a fee award.

The Commission stresses that the new legislation, rewriting former section 6307, removed whatever significant benefit Earth Corpss victory on appeal may have provided. According to the Commission, by amending former section 6307 the Legislature specifically provided for exchanges like the Queensway exchange that would give the public access to or along the water by giving in exchange lands that have been cut off from the water and acquiring for the trust lands that will significantly benefit the trust by providing that access.

The Commission, the City, and Earth Corps all reference Bruno v. Bell (1979) 91 Cal.App.3d 776 (Bruno). In Bruno, an attorney proceeding in pro. per. successfully challenged the validity of a statute providing for distribution to counties of rental income received by the state as a result of its acquisition of real property for highway purposes. As a result of the courts decision, the funds were diverted from local taxing agencies to the state highway fund. The trial court awarded plaintiff $30,000 in attorney fees, finding the saving of administrative expenses as a result of the decision conferred a substantial benefit on state taxpayers. (Id. at pp. 780-782, 784.)

The appellate court reversed the award of attorney fees. The court noted the underlying action uncovered a constitutional flaw in the statute and resulted in the cessation of the flow of money from the states highway rental account to the county governments. However, the court found the courts action did not result in substantial benefit to the public. The court observed: We may judicially notice the fact that the counties lost an estimated $7 billion last year in property tax revenue as the result of the recent constitutional tax limitation, Proposition 13. We may further take note of the fact that the Legislatures swift response to the courts decision below was to immediately pass an urgency measure designed to eliminate [Streets and Highways Code] section 104.10s constitutional infirmity while restoring to the counties their 24 percent allocation from the highway properties rental account. [Citation.] Under all these circumstances, we cannot agree with the lower court that Bruno has rendered a substantial benefit to an ascertainable class. (Bruno, supra, 91 Cal.App.3d at p. 785.)

The Commission and the City both argue the situation in the present case mirrors that faced by the court in Bruno. Earth Corps, not surprisingly, argues the situations are distinguishable.

The City states, as in Bruno, the Legislatures amendment of a statute was unequivocally intended to reverse this Courts prior construction of the statute and affirm multiple grounds that the Commission had relied on in approving exchanges. Under such circumstances, a significant benefit has not been conferred on the public by [Earth Corpss] lawsuit.

According to the Commission, the Peoples elected representatives decided that the publics public trust rights would be enhanced by permitting the Commission to make a broader range of public trust land exchanges than those permissible under our interpretation of former section 6307. The Legislature specifically provided for exchanges like the Queensway exchange by giving broader authority to the Commission.

Earth Corps strenuously disagrees. Earth Corps argues the Legislature did not undo the result of our decision, nor did it enact legislation to uphold the unauthorized exchange at issue. In addition, Earth Corps points out, the Legislature did not validate the exchange at issue by providing that the revision was to apply retroactively. In sum, Earth Corps contends the Legislature did not change the effect of our ruling, whereas the Legislature in Bruno undid the effect of the trial courts decision. Earth Corps further notes the court in Bruno also denied attorney fees on the grounds of public policy, since the plaintiff attorney in Bruno represented himself as a party litigant and also claimed entitlement to attorney fees for his services.

Contrary to Earth Corpss analysis, we find Bruno instructive. Here, as in Bruno, a plaintiff successfully challenged an official action. Following that judicial success, the Legislature acted quickly to rewrite the statute to permit exchanges such as the Queensway exchange, removing the limitation we found in the old version of section 6307.

The Legislature did not approve the Queensway exchange or direct the Commission to approve the exchange. As the Commission points out, neither action would have been appropriate. Section 6307 represents a legislative delegation to the Commission to approve exchanges that comport with the conditions and purposes set forth by the Legislature. The Legislature provides the guidelines; the Commission evaluates whether a proposed exchange complies with these guidelines.

In amending former section 6307, the Legislature broadened the Commissions authority to approve exchanges such as the Queensway exchange. This was not the outcome sought by Earth Corps. Although Earth Corps now claims it desired a clarification of the law, its original petition sought to block the Queensway exchange as contrary to the public trust.

The trial court cited these considerations in denying Earth Corpss motion for attorney fees. Under the circumstances, we find the trial court did not abuse its discretion in determining that although Earth Corpss petition conferred some benefit to the public, the benefit was not significant within the meaning of Code of Civil Procedure section 1021.5.

DISPOSITION

The judgment is affirmed. Defendants and real party in interest shall recover their costs on appeal.

RAYE , J.

We concur:

NICHOLSON , Acting P.J.

MORRISON , J.

^[1] All further statutory references are to the Public Resources Code unless otherwise indicated.